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French media tycoon Stéphane Courbit’s FL Entertainment and private equity group TowerBrook have led a $400mn investment round for Paris-based marketing group The Independents in a bet on the continued boom in the luxury goods market.
FL Entertainment, the group founded by Courbit that also owns TV production group Banijay, and TowerBrook will on Tuesday announce an investment in the business to accelerate its development and international expansion.
The money is expected in part to be used as a war chest to buy rival agencies as part of an aggressive expansion strategy to double in size in the next two years.
The $400mn being raised by The Independents is composed of debt, preferred shares and equity, although the company declined to provide a valuation for the group after the investment.
The fundraising will allow a buyout of the previous shareholder Cathay Capital, a private equity group, which acquired a stake in the business in 2017 when the company was founded.
FL Entertainment and TowerBrook will become minority shareholders in the group, which is still majority controlled by its co-founders, including Isabelle Chouvet.
The Independents is a global group of agencies for the luxury and fashion market, covering services such as strategy, creative, influencer marketing and communications services for brands.
It includes founding agencies K2, the Asia-based events, design and production company co-founded by Chouvet in 2002, and Karla Otto, the public relations company founded in 1982.
Chouvet, chief executive, said: “Fuelled by the behaviour of digital native Gen Z and millennials, luxury brands are now becoming cultural brands that must remain ‘culturally relevant’ with their audience.”
She added that brands “now need to connect with people in a way that goes beyond what they have traditionally done to cut through the social noise and resonate with customers both online and offline, across territories”.
The company wants to more than double in size by 2025 through acquisition and international expansion. Revenue for the group in 2023 is expected to reach $450mn, split between Asia, the US, Europe and the Middle East.
The deal includes debt raised by Banque Internationale à Luxembourg, Société Générale, LCL, La Banque Postale and CIC Private Debt. The investment from FL Entertainment and TowerBrook will be a mixture of equity and debt alongside the bank financing in the investor group.
Fahd Elkadiri and Edouard Peugeot, managing directors at TowerBrook, said in a statement: “We believe there continue to be tremendous growth opportunities for the company.”
FL Entertainment was founded by Courbit, and floated in Amsterdam last year. François Riahi, chief executive, said the group operated in a “dynamic industry, carried by strong tailwinds and that remains largely unconsolidated”.
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